Japanese mobile industry in hot water over players' spending sprees

There's a sense of unrest surrounding Japan's mobile industry after developer Cygames allegedly used false advertising to encourage players to spend huge sums of cash in a bid to unlock rare characters. 

As reported by Bloomberg, earlier this year Cygames announced it would run a promotion making it easier to win certain rare characters in its smartphone game Granblue Fantasy. 

In the wake of that announcement, some of Granblue's most dedicated players spent thousands of dollars on in-game crystals that are used to unlock characters. Sometimes the crystals contain weapons and amour, but, on the rarest of occasions, they'll contain a hard-to-find companion.

Why spend so much? Their reasoning was simple. Cygames said it would up the odds of unlocking its most sought after characters from 3 percent to 6 percent; a move which convinced some players to spend over $6,000 in mere hours. 

Although many unlocked their desired character (with some even streaming their spending spree online) some feel cheated by Cygames, and have now filed a formal complained with the Consumer Affairs Agency. 

Cygames has issued refunds - in the form of in-game currency - in response, however, on the day those refunds went out the combined stock value of Japan's mobile developers reportedly fell by over $1 billion dollars. 

This isn't the first time that "gacha" marketing tactics (marketing techniques that implement some form of gambling) have come under fire in Japan's mobile game industry. Back in 2012, stocks took another hit after regulators banned certain gacha tactics that were deemed too exploitative. 

At the time, Japanese game companies (including Konami, Gree and DeNA) made a public show of abandoning those gacha tactics. In the years since, Japanese game companies have found new ways to use gacha techniques and, as Bloomberg notes, the average revenue per paying user (ARPPU) for the region's biggest games now ranges from $373 a month for Mixi's Monster Strike, and $57 for GungHo's Puzzle & Dragons.

Dr Serkan Toto, a expert on Japan's mobile games industry (and occasional Gamasutra blogger) weighed in on the matter, suggesting that Japanese creators might've just shot themselves in the foot. 

“It’s the perfect fodder for people who are against the mobile game industry in Japan,” said Toto, speaking to Bloomberg. “The videos [which show players spending massive amounts of money in Granblue Fantasy] are basically delivering the ammunition for people who are critical of the industry for being exploitative and greedy.”

As it stands, Cygames is being chased by frustrated consumers who want answers, and although it's unclear as to how the saga will end, Macquarie analyst David Gibson believes, at the very least, it could force companies to become more transparent. 

"What’s more likely from an industry point of view is we might see an adjustment to the way the odds are displayed so they’re clearer and simpler and less misleading," said Gibson, speaking to Bloomberg.

The full report on this matter is worth reading over on Bloomberg.